Moving Away from China. Staying Away from Slavery. Clearing Due Diligence

The current trade disputes with China have caused a growing number of businesses to look for other manufacturing sources. While some are setting up new deals in other Asian countries, a number of companies are looking at non-traditional locations.

One of the emerging areas is West Africa. Why? Low-cost labor, good natural resources, reasonable shipping costs and schedules, and low risk of government tariffs. Put it all together and it can make sense to move manufacturing to these places that you may never have heard of.

Of course, many of these countries are relatively undeveloped and offer their own set of challenges. These include political instability, security risks and – and this seems almost inconceivable in 2019 – slavery issues.

Yep, slavery.

Some estimates suggest there are more than 40 million slaves around the world. These are victims of human trafficking, forced labor, forced marriage, sexual exploitation, etc. And one of the worst areas for this is West Africa.

How does this impact American businesses? There is a new due diligence item that is showing up in business transactions: sellers must now confirm their international manufacturing sources are not using slave labor. Not only in West Africa, but in South Asia, South America, and even former communist countries in Europe and Asia. This confirmation is also being required of businesses who supply their products to the US government and other large institutions that must validate the legitimacy of their products. It’s no longer good enough to claim a product is green – now it must be ethically defensible on all fronts.

And before arrogance sets in that this could never happen in the good ‘ole USA, it’s good to remember the Agriprocessors meatpacking plant scandal in Postville, Iowa. About 10 years ago it was discovered that a kosher meatpacking plant was being staffed by more than 400 illegal workers from Central America who were victims of child labor in prohibited jobs, sexual and physical abuse by supervisors, nonpayment of regular and overtime wages, denial of immediate medical attention for workplace injuries, workplace safety issues, etc. While it wasn’t slavery, it may have been close.